E.On announces a 3.7% energy price increase

E.On is to increase its energy prices by 3.7% on 18 January 2014, hitting millions of customers with an average increase in their dual fuel bill of £48.

The firm, the last of the Big Six energy firms to announce a winter price increase, said this was a lower average percentage rise than any other major supplier.

However, E.On, which has five million customers, said the rise had already taken into account recent government initiatives that are saving households £50 off their annual bill.

The average annual dual fuel bill will now cost £1,304.74, up from £1,260.47. This means that in total, E.On has increased its energy bills by 12.4% in the last 12 months, according to Moneysupermarket.com.

From 18 January next year, the firm added that electricity-only customers will see a price rise of 3.7% (raising bills by an average of £20), while gas-only customers will see an increase of 4.6% (£37).

Tony Cocker, chief executive at E.On UK, said: "There is no escaping the simple fact that any price rise is unwelcome news for customers. Whilst there can be no guarantees, the likelihood of further price rises over the next 18 months caused by an increase in the cost of social and environmental obligations has receded due to the recent action taken by the Government.

Yesterday, chancellor George Osborne confirmed the government will cut green levies to try to lower energy bills.

Claire Francis, editor-in-chief at Moneysupermarket.com, said: "Despite the Chancellor's announcement of a reduction in green levies which should lead to a £50 reduction in average annual bills, the majority of households will still be paying more to heat and light their homes because the cut doesn't outstrip the hikes."

Jeremy Cryer, energy spokesperson at Gocompare.com, added: "There's been a lot of talk this week of energy bills coming down thanks to the deal struck between the government and energy providers, but the fact remains that people's bills are still going up, like they have been for several years, only not by as much."

To find the cheapest tariff on the market, consumers will have to look outside of the Big Six, with Spark's Advance 2 currently the best deal on the market costing £1,116.41. The cheapest fix on the market is Co-op Energy's Fixed Price March 2015, which costs £1,167.90.